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tv   Mad Money  CNBC  April 10, 2017 6:00pm-7:01pm EDT

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devon energy might be breaking out to the upside. >> i'm melissa lee. thank you for watching. see you tomorrow at 5:00. meantime, "mad money" with jim cramer starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to make you money. my job is not just to entertain you, but to educate and teach you. so call me at cramer@c nrkcrame.
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i i'm sick of amazon, i'm sick of tesla. but believe it or not, the market is bigger than those two names and i think we have to start recognizing the massive number of stocks that are doing well, that are entirely in bull market mode. the dow gained 2 pointses, s&p 500 gained .08%. i think we should start with t catca catcat cat piller piller was a rill do. now it's at 97.
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what happened? first donald trump was elected president and because he's pro oil and gas and drilling and he's also pro coal. donald trump can't say cove coa. plus if trump can pass his infrastructure package, admit d admittedly something that doesn't look very promising for this congress. but it's impossible to subject how many people have been laid off, but the number is substantial. caterpillar has gotten a hold of its dealer network. they had that chronic problem that forced the company to discount it's products dramatically. it's solving the really intractable supply chain issue. and the global economy has changed, particularly china. 50% of the company's sales come from overseas. when you consider there's been a
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big investigation of cat's tax payment, it's understandable that they have moved their headquarters to chicago. the gigantic engine maker, cummins gets 48% of its sales from overseas. for the longest time, we presumed that eaton, the electrical control company, hydraul hydraulics, power management systems, we just figure it couldn't get its act together. we figured it would just miss. eaton doesn't miss anymore, it's the 45% of business that it gets from overseas.
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parker-hannifin, it's just plain old basic truly stuff with a fantastic aerospace franchise. it's up by an astonishing .52. we all know that boeing and honey well and united te d technologies are doing great. how about rockwell collins? another maker of aero spaes components has had a run also. how about ingersol-rand? does anyone even care about these great american companies that stayed here, defied the foreign competition odds, and stayed afternoon? no, you know what it is, it's amazon, apple, general electric,
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but what about those players that defy, does anybody care about adhesives? the sleepy company only known as being the last business to ship jobs to mexico. it's been a rocket, stock has gone from 1.77 to 1.82. even though we have the lowest feed stock in the world, huntsman chemical, commodity per vaer, it's up 37% for 2017. i know not much that's special about caustic soda and chlorine. olin has seen its stock go all. you probably missed westlake's run. how about that sleepry philly company, fmc, the one with the emphasis on the chemicals that
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protect crops? it's powered from 2.30 to -- how about that sleepy spinoff, that no one really cared about. called chemours, that's a company that principally makes whitens. would a $6 or $7 move help you? cc has gone from $36 to $47. louisiana pacific, which makes plywood among other products has soared 37% year to date. and potash, for every one of these i have mentioned, there's probably four or five others doing the same thing, just percolating up on better numbers, and maybe some hope that the trump administration
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will deliver a better business environment? i would emphasize, that it's the former, the business itself, with management, that's the real driver here. and despite all the hand wringing about how we don't have a manufacturing base, or how we can't make wood and plastic? it's a bunch of nonsense. we spend a lot of time talking about exciting pharmaceutical companies. we want to hear everything about whether proctor and gamble is mad at facebook. pizzas and burgers, bing watching, or an activist action that saw a 10% gain in whole foods. but to me these unsung manufacturing companies that stayed here, and just grinded it out, simply doing what they do best, offering the finest
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products, both here and abroad with great prices, that's where a lot of the money's been made. bottom line? i think we ought to open our eyes to what we don't care about. what's still made here, because that's where some real noncontroversial performance not in the paper is gained. i guess you could say these companies, these companies, they had me at o-rings, they had me at hoses, polyvinyl, i'm proud these things are even if they aren't made in silicon valley, or wall street or hollywood. >> jonathan in new york. >> caller: i wanted your opinion on rent-a-center. since then it's gone up about 19%, today a nice 17% bump. should i hold or take my profits
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and move on? >> the company, here's the problem, there's an outfit that's putting pressure on them and the company issued a statement today, i did not because i was working on the top of the show and doing all the other pieces, i did not get a chance to analyze the statement, it came out mid afternoon, we're going to have to do some work on rent-a-center. i like what's going on, but there's too many moving parts, congratulations on getting that game. >> kevin in new york. >> caller: my question is on mattel, and they have a payout on dividends in excess of $1 and they recently got a new ceo, and they kind of have a weak balance sheet, should i buy, hold or sell? >> anything can balance, i was going over charts over the weekend. i was glad to see that hasbro
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has gone down i would rather buy hasbro as a discount, than i would buy mattel just bouncing around along the bottom. this market is broad, this market is powerful and it's time to recognize that there's more than just tesla and more than just a handful of stocks that we just talk be endlessly, like amazon. the retail space has been showing some signs of life, by should you try on and which should you leave on the remark? the largest utility in the world. it's got an $18 billion deal just hit a road block. what it means for your money going forward if you're in the stock. plus i'm pointing to the best brewers i can find on wall street. stick with cramer. >> don't miss a second of "mad
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money." send jim an email to or give us a call, at 1 1-800-743-cnbc. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
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late last week we got a big relief rally in retail after costco reported a strong 6% increase in same store sales e and l. brands posted some numbers that weren't nearly as bad as people had feared. in response, the whole retail cohort bounced. but just because the stocks have started rebounding, that doesn't mean that the dynamics of bricks and mortar merchandising has changed, the business is declining. there's too few shoppers willing to leave their homes and actually buy things in person. that's why tonight i want to break down the kind of retailers that remain dangerous in this environment, and the few retailers, just a couple that could be worth owning. i'll give you a hint.
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if it's hostage to the mall, it's suspect. if it's outside of the mall, then it might just have a chance. let's go through them one by one starting with macy's who's in trouble. the company's currently in the process of shutting down 100 underperforming stores in order to control costs, when your best strategy is to close lots of stores, then you know things are tough. macy's reported it's latest quarter in late february, the company gave some very weak full year-guidance. and then identified another 50 stores that might be worth closing. jeff jeanette took over as ceo. it's a hard time to change management. it's going to make it that much harder for macy's to execute on any kind of terms. it just goes to show how difficult things have gotten in the mall.
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when they spoke last weekend at the jpmorgan conference, there was no number cut, that's right, they left the numbers unchanged. that's not much to hold on to, but it's worth basically 2 1/2 bucks on the upside. and jcpenney's revenue came in weaker than expected, it's same store sales declined by 23%. even worse, the company's gross margin, what they make after the cost of goods sold is minus 100 basis points. i say ouch. at the moment, penny's is losing money, but the company's got to open 100 more stores. although most analysts think they're close a lot more locations than that. meanwhile the company's got a
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heavy debt load. i can give jcpenney one complement, at least it's better than sears. what about nordstroms? nordstroms is doing a lot better than macy's or jcpenney. when the company reported at the end of february, it reported a sizable earnings beat. even as the fancy department stores had weaker than anticipated revenues and a .9% in same-store sales, that eat not good either. it's been spending billions to upgrade their technology, and they're spending a lot of money to open new stores and relocate others. ecommerce is a double-edged sword. online sales are less valuable than bricks and mortar sales,
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because it's much easier to comparison shop on the web, and people make far fewer impulse purchases than they would in person. of all the mall-based department stores, nordstroms is in the best shape. it's opening new stores, it's got a fabulous ecommerce business and it's rack division is in good shape and the company's strength give us it a lot more flexibility. i think we're talking about the best house in a bad neighborhood. let's give it 3 or 4 points on a bounce, then you got to move on. but i think a 3 or a 4 may be in the cards for you. what about the nonmall-based players? frankly, this is where the action is, regular viewers know that i like offpriced changes, along the lines of burlington stores, tjx, although it's been
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stalled of late, i think it deserves to trade at a premium. burlington stock is doing much better. in addition, costco is doing well, here's one for you that i haven't talked got, maybe in four or five years, other than where i buy my socks, khol's. granted there's not that much love for khol's. however the fact that khol's are not located in the malls, that's a giant positive. plus kohl's is -- this is only a #.8 ---the company's gotten very good at keeping inventories lean
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and it's just starting to see the benefits from it's multiyear, mull by billion dollar investment in technology, meantime the company is weighing you a handsome 5.5 yield. it's getting some better brands n i like that it's recently added under armor, to keep with nike, so it's dependable. a new name brands will really make you sit up and take notice. i think you should get in ahead of other name brands that may be going in there. and let's not forget, here's one that i, again, stopped talking about and that was a mistake. walmart. yes, walmart, a retail titan with tremendous heft and a retail balance sheet. not many major retailers can deliver genuine same-store sales
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growth these days. meanwhile management is making a sales push. plus even though i don't think the border tax idea that the congress keeps pushing is a serious possibility. in the unlikely event that i'm wrong, and it does happen. walmart is maybe one of the few if not the only retailer that could handle it. the company claims it only imports about a third of its goods, as opposed to 90% of all it's knives and electronics. the stock is looking fabulously. i could actually see walmart inches toward it's old high of $90 because of better management and superior prices. it will be a lengthy multi-year journey, but with walmart, you got a bit of a selloff, i think you got to do some buying. here's the bottom line, while the whole retail cohort we covered last week. if you want to find any retail
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winners, you have to look outside the box and outside the malls. it walmart, kohl's, the outstanding burlington stores or tjx all of which could be big business. beer has become big business, turn your suds into cold cash. which big brewer could be ready to pour some gains into your portfolio. and why you should take the upgrades of amazon and tesla with a grain of salt? i'll explain. stick with cramer.
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last thursday we spoke to rob sands, the ceo of consolation brands after his terrific liquor company had just reported a phenomenal quarter. and he told us that sales for constellation's number one beer brand, corona were so strong that they're propelling the whole entire industry. in fact this one company alone accounted for a quarter of the growth in the entire beverage alcohol business and not just beer. that's in the united states. that's more growth than the next three competitors combined. so in light of the strength of consolation brands, we got to think about this industry. it's worth asking is this a company specific situation, or is it a trend here that helps the entire brewers place. the major players, anheuser-busch, moleson coors
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and constellation. let's start with the top dog, anheuser-busch. the parent of budweiser among many other brands, which of course trades under the symbol bud. bud has become by far the largest global grewer, it's four times the size of it's closer competitors chbl nobody even comes close to these guys. it can take advantage of all sorts of opportunities that might not be available to small brewers. bud has a huge part of the market. so how is anheuser-busch actually doing? the company reported its latest quarter a little more than a month ago and frankly the results were far from stellar. while bud's revenues came in higher than expected, that's good, it whipped on earnings because of that acquisition
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deal. and bud actually declined during the quarter, even though their management bragged about how their stock had been improving. what people are really looking for going forward, are the $2.2 million of acquisitions. plus bud payses you a 3% yield, put it all together, and the numbers don't -- after decelerating for years, bud will get a boost from this deal. but at this point they need to turn around their existing assets. the company's gotten so big that it can keep using mergers to fuel its growth, but that's about it. as i'm an avid drink her of bud lite, the stock is nothing to write home about.
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how about the boston beer company? oh, man, this used to be such a hot beer. that's a parent of sam adams, which has the ticker sam. they were the greatest brewers around, it was one of the great growth stocks. but a couple of years ago, boston beer got too big for its own good. the stock peaked in the low 300s in january of 2015. since then it's lost more than half of its value. craft beer competitors kept nipping at their heels. that red hot craft beer that consolation brands acquired a year and a half ago. all these brands that have a little bit of business, they all nip at this thing. have the expectations gotten low enough that the stock can get some traction after this epic decline? the last time boston beer reported, it was back in february, the company posted a
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top line beat. thanks in part to cost of sales. unfortunately, management's guidance, that's what we really care about. they forecast their earnings somewhere between $4.20 and $6.20 for 2017. that suggests they don't really have a handle on their business, that's a $2 range. the demand for craft beer by a large national company is in decline. sam adams is a craft beer, even as smaller indy beers keep trying to carve up their business, like the ipa beers, that to me taste like cheerios, but a lot of people like them. at this point boston beer doesn't really seem to have a plan for how to go forward and turn around sam adams, on up top of that, the company is on the hunt for a new ceo. to me it may take a long time for the company to right itself.
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what about molson kocoors, that was a total fire sale price. the company now totally controls miller lite. not a bad brand, coors lite my favorite. as well as a bunch of imports. tap has become the second largest largest brewer in america. management is now forecasting $550 million in total cost sales for 2019. it's last quarter sales was not so hot. here's the thing. while i really do like this, i like the miller coors deal, the fact is that taps volume has
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been steady declining for years, and the domestic beer industry has been declining. but at this point it's all about the fact that they bought the miller coors for a song. it's not the kind of organic growth that money managers salivate over. i expect it to go up actually, but not like consolation did, speaking of consolation brands, which in addition to its major beer biz plus sells a lot of fine wines, this company is nothing like it's competitors. consolation brands are on fire. including terrific mexican beers like magello and corona, and we had a hard time keeping in stock, pacifica, which is not a
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premium beer in mexico, it has become the hot beer inn among young people in this country. it's made a bunch of craft beer act which is tigss, and these other buers have been experiencing declining sales, consolation is giving you dibble double digit revenue growth. a lot of investors have been worrying about the fact that consolation could get slammed by that border tack idea that congress keeps talking about. i think a border tax is preliminary suicide and it shouldn't detract from your interest in this great company. best of all, consolation's actually cheaper than bud or
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boston beer, it trades at 21 times earnings, versus 24 times earnings for bud, 25 times earnings for boston beer, this is why i say this one's going to go up. molson coors will work, just not as handily as this one. consolation beers has become the undisputable king of the beer space. i would make a case for molson coors or bud, but consolation is the best of breed, it's the one you should own, especially when the market gives you a board tax dip. >> john in ohio. >> caller: in reference to altria, i would like to know if you would hold or buy more. >> remember this tobacco stock, and forget, i don't want to ever check my morals at the door, i
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care about this, i don't want to see my kids smoking, but you give a good yield,. >> ed in west virginia. >> caller: following your own advice and my own research, i have done exceptionally well in the markets over the years, and i want to thank you for your help. >> all we did was talking about stocks and people love this show and i'm thrilled. let's go. >>. >> caller: before the election, gun prices were high and gun sales were high, and concerns over the potential attacks on the second amendment, with the election of president trump, those concerns have eased prices of the stocks have declined and sales have declined.
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companies like smith and wesson, american outdoor brands, there's a couple of positive indicators, they have recently announced the $50 million stock buy back, with a p.e of about 5 1/2. >> this is when you want to buy. i think it overreacted to the trump victory, i think that gun sales in this country will be strong. i think that the new appointment to the supreme court makings it so that we're really not worried. if you're a second amendment clean constitutional history scholar or someone who likes guns, i'm telling you, you're going to have a good period of sales and the stock is bouncing back already. consolation brands is the king of beer, i know we used to think it's bud, but it's these guys, they are the best of breed in the space, they're the ones you should own. next on "mad money," everything's bigger in texas, especially the utility
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companies, i'll tell you what next year's merger troubles could have on the market. i tell you what today's headlines mean going forward. and all your calls, rapid fire in today's edition of "the lightning round." so stick with cramer. ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning it all makes sense. to power global e-commerce fedex networks are massive, far-reaching and, yes... a little magical.
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today i'm going to circle back to a sector that doesn't get any attention. just last year, texas -- now it's looking like this deal could be in real jeopardy. if it falls through, i think investors will turn on next era, with a vengeance, because this will be the second time in a year that this company has failed to close on an
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acquisition, next year's credibility is on the line right here. the whole narrative of its growth a trajectory that has made it into a power house is but it's totally fixable. let me tell you what's going on with this next corps on corps zeal. the company has a big power business in florida. it's one of the biggest regulated companies in the country. in addition it's got a guy -- it also has eight nuclear plants. so what makes me think this this stock currently just four points off it's all-time high, could possibly be teetering on the brink? last july we heard that nextera agreed to buy -- now energy
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future holdings refused to trade under trade under txu was-big leveraged buyout, they turned txu into a holding company, with three opposite companies, and oncor, a regulated power and distribution business. energy future holdings got saddled with $40 billion in debt, which led the company to declare bankruptcy three years ago. after a couple of years, the company tried to sell off it's nonconsolidated businesses. the texas public utility commission tried to impose conditions on the transaction that hunt didn't like. and that's when nextera energy
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step step ped in, offering to buy -- that pesky texas public utility commission is the only thing left standing in the way of nextera. after surging up to $133 in late march, nextera stock started pulling back when the chairman said she might torpedo the nextera deal. oncor is a texas institution, and they have been squeamish about selling to a state like florida with a large clean power business. a lot of quibbling about how -- it would be easy to find a compromise if the question was just how many reps are on the
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oncor board. which is the real reason why the tpcu may stop this deal, money. some of the largest consumers of electricity in texas call themselves the texas industrial energy consumers filed a brief against this transaction. the truth is these businesses don't really care who owns oncor. but they see this as a chance of getting additional money. in the brief, these industrial energy o energy -- and they want the company to share the wealth of that to consumers. if they have to share those gains, though, well, i mean too much of them? there's not that much point in doing the deal. that's why hunt consolidated walked away from oncor. the tpcu insisted their share their profits with customers. to what happens to nextera
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energy if this transaction gets blocked? next term the oncor deal could be worth 25 cents per share. in short it's worth about $5 a share, which isn't the end of the world for a $129 stock. but longer temple, if nextera lets this deal fall, it's the third time it's happened in two years. in late 2014, the company tried to buy hawaiian electric utilities. but the high wan electric utilities blocked that option. maybe nextera can't deliver the deals they promise because state regulators keep getting in the way. even though nextera has the highest valuation of any of the seven largest utility companies in america because it's seen as having a growth agenda. take away the growth and the
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stock gets slammed. so tpuc is having about meeting on thursday, where it will deliver it's ruling as it stands. and i think they'll probably reject the deal, but i think nextera can make it happen if they just bow to the demands of those texas industrial energy consumers. all told this adds up to $840 million in rate breaks to customers over the next four years. that's costly, but not as costly as it would be for the shareholders next year. i don't know, to me it seems like a no-brainer. here's the bottom line, there are very few growth utilities out there. and if nextera wants to retain it's status as the premiere growth utility? it needs to swallow it's pride and give the texas public
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utility commission what they want. ne ne nextera gets it done and it's the only utility that's not hostage to the interest rate cycle. if not, the well deserved premium goes out the window. and it's just another utility and will trade lower than it's current $129 price tag. "mad money" is back after the break. ♪
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it's time for "the lightning round." [ buzzer ] and then "the lightning round" is over. we start with ronald in new jersey. >> caller: i was wondering, what do you think of allibaba stock. >> i think it's not that expensive given it's growth rate. i'm a minority of one but that's how i feel.
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>> caller: boo-yah jim, i want your take on the stock coherent, i bought it at $30 at 1970. remember, it's laser products, but that is one good stock. >> i'm going to go to koreen in new york. >> caller: i'm interested in amg, what happened? >> goldman put a sell on it, and goldman's view is well reasoned, it's basically the same view that you can have in video. others are catching up to them in terms of technology and also pricing. [ buzzer ] let's go to olga in ohio. ol
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olga? >> caller: i would like to know what do you think is the possibility of a takeover for esperion her pud ticks. >> they all need pipelines. and by esperino, i would be one, but on a fundamental basis, it is overvalued. and that, ladies and gentlemen is the end of "the lightning round." round." yo u got here? this bad b is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go!
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look, i have said it before, including the top of the show, but the endless commentary on tesla and amazon is really starting to rankle me. there are so many good stocks go up without comment. i'm reading about price targets being boosted endlessly higher, to see that amazon is headed to $1,000, more people are adopting prime. i know tesla's got a staggering story, but when i read miper jaf
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free's dramatic price in -- you can't infor this stock. i find this whole exercise fansful. as the research says, any other company would be crucified for having that balance sheet and for doing that spending, but not tesla, not tesla because for some other reasons, the cars are not great. what bothers me about this recommendation? it's that $325 price target. tesla shouldn't be compared to nord or gm. on top of that, why not just have a sky's the limit price target? because if it's overvalued at this level, what's the point of putting a target price on it? the analysts say that anyone who buys tesla need to create a
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creative methodology. why can't you just say we don't know why it's going there, but we know it's going there. how about needham's 9$900 to $1,000 price boost for amazon today. if the survey you're relying on shows amazon up 50% in year. why stop at $1,000? because that's a little bit more than 10% of the current price target? but amazon has infinitely more market share. then we'll be stuck trying to figure out who's still shopping at brick and mortar stores. there's some talk on the street, how about the brilliant ceo of menato's manhattan is unique, things like times square, i think that's very true, even though a handful of his ten
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lapts are very special. many are continuous ike -- anyway, i think that what really matters here is that amazon like tesla simply cannot be bound by valuation metrics, it's got offering that can't be duplicating. why don't you ason raising from $900 to infinity and beyond. that kind of analysis wouldn't be any less rigorous than what they're currently slinging at us now. stick with cramer.
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i'm jim cramer and i'll see you tomorrow. >> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ my name is ryan carpenter. i live in portland, oregon, with my turtle, mo, and i'm the owner of moberi. i love living in portland. portland is the place where weird ideas thrive, and what i do is definitely a little weird, and people really like that here. leading a healthy lifestyle is something i've done for a long time. i frequently ride my bike around to the farmers market,


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